New Oil and Gas Act Trumps Pennsylvania’s Environmental Amendment at Municipal Level -- October, 2012

New Oil and Gas Act Trumps Pennsylvania’s Environmental Amendment

By John R. Embick, Esq. -- October, 2012

Co-Chair, Environmental Law Section

Earlier this year, Governor Tom Corbett signed into law Act 13 of 2012.  Act 13 repealed Pennsylvania’s Oil and Gas Act, and replaced it with a codified statutory framework regulating oil and gas operations in the Commonwealth, now found at 58 Pa.C.S. §§ 2301 - 3504 .  The Marcellus Shale Gas industry, Governor Corbett, and others pressed for enactment of extensive revisions to the Oil and Gas Act, in order to make the development of natural gas resources more efficient and favorable for the industry.

In the case of Robinson Township v. Commonwealth of Pennsylvania, 2012 W.L. 3030277, ___ A3d ___ (Pa. Cmwlth., July 26, 2012), Commonwealth Court recently reviewed the legality of Act 13 in the context of a challenge by a number of citizens, including a physician and the Delaware River Keeper, and a number of municipalities.  Numerous claims were raised in the litigation.

The main holding in Robinson Township, authored by President Judge Dan Pellegrini, was the issuance of an injunction, barring the Commonwealth from enforcing the provisions of the new Oil and Gas Act, which required municipalities to allow all oil and gas operations in all zoning districts, including residential districts (the matter is on appeal to the Pa. Supreme Court).  The court held that §3304 of the new Act 13, now codified at 58 Pa.C.S. §3304, violates substantive due process because it allows incompatible uses in zoning districts and does not protect the interests of neighboring property owners from harm, alters the character of the neighborhood, and makes irrational classifications.

Judge Pellegrini evaluated the different and competing roles inherent in the exercise of police power in the form of natural resource utilization control on the one hand, and zoning on the other hand:

"However, the interests that justify the exercise the police power in the development of oil and gas operations and zoning are not the same. In Huntley & Huntley, Inc., 600 Pa. at 222-24, 964 A.2d at 864-66, our Supreme Court explained that while governmental interests involved in oil and gas development and in land-use control at times may overlap, the core interests in these legitimate governmental functions are quite distinct. The state’s interest in oil and gas development is centered primarily on the efficient production and utilization of the natural resources in the state. Zoning, on the other hand, is to foster the orderly development and use of land in a manner consistent with local demographic and environmental concerns."

Robinson Township, Slip Op. at 31.

Another interesting feature of the holding in Robinson Township, was the court’s resolution of Petitioner’s claim asserting that Act 13 violated the provisions of the Environment Amendment, found in the Pennsylvania Constitution, at Article I, § 27.  Article I, § 27 provides as follows:

"Natural resources and the public estate

The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people. "

 Petitioners claimed that Act 13 violated Article 1 §27 of the Pennsylvania Constitution because Act 13 denies municipalities the ability to carry out their constitutional obligation to protect public natural resources as required by the Municipalities Planning Act (“MPC”) (Count VI of the Petition for Review).

Judge Pellegrini dismissed this count, indicating that the obligation of municipalities to plan for the protection of natural and historic resources contained in section 301(a)(6) of the MPC, 53 P.S. §10301(a)(6) (section 301 is section of the MPC that requires comprehensive planning and plans), is preempted by Act 13.  Judge Pellegrini went on to say:

"It [Act 13] preempts a municipalities’ obligation to plan for environmental concerns for oil and gas operations. One of the purposes given by the General Assembly in enacting Chapter 32 of Act 13, dealing with oil and gas operations, was to “[p]rotect the natural resources, environmental rights and values secured by the Constitution of Pennsylvania. 58 Pa. C.S. §3202. In Section 3303, the General Assembly specifically stated that all local obligation or power to deal with the environment was preempted because Chapter 32 occupied “the entire field to the exclusion of all local ordinances.” 58 Pa. C.S. §3303. By doing so, municipalities were no longer obligated, indeed were precluded, from taking into consideration environmental concerns in the administration of their zoning ordinances. Because they were relieved of their responsibilities to strike a balance between oil and gas development and environmental concerns under the MPC, Petitioners have not made out a cause of action under Article 1, §27. "

Robinson Township, Slip Op. at 43.

Some attorneys representing parties engaged in natural resource development in industries where partial preemption of local control exists (e.g., quarrying), now advocate that this part of the holding means that zoning provisions that in any respect address the intensity or bulk of such uses, are void.   We think the Pa Supreme Court is likely to further clarify this issue.

 Stonehenge, UK

Stonehenge, UK